The European Commission today tabled a proposal to allow the European
Union budget to share the cost of market support measures in the eggs and
poultry sector. Since the beginning of the recent avian flu crisis, consumption
of poultry and eggs has fallen dramatically in some Member States, leading to a
sharp reduction in prices. The current regulations governing the eggs and
poultry market allow the EU to co-finance compensation measures only in cases
where there is a case of avian flu on a farm or where farmers are prevented from
moving their poultry because of restrictions imposed on veterinary orders. There
is currently no possibility to provide EU aid to take account of market problems
linked to a fall in sales caused by a loss of consumer confidence. Because of
the gravity of the current market crisis, the Commission now proposes to
co-finance 50 percent of the cost of market support measures linked to a drop in
consumption and prices of eggs and poultry. The proposal will be sent to the
European Parliament and the Council, hopefully for adoption by the end of April.
Once the legal base has been adopted, Member States will have to submit their
proposed measures for Commission approval.

“This unprecedented situation can no longer be dealt with using the
existing tools,” said Mariann Fischer Boel, Commissioner for Agriculture
and Rural Development. “That is why we want to extend the scope of the
existing regulations to allow EU co-financing of special market measures. Each
Member State will then be able to design the measures best suited to its
particular situation. In my view, the most sensible approach would be to
compensate farmers for measures which temporarily reduce production. I hope that
the European Parliament and the Council of agriculture ministers will adopt this
measure quickly, to allow the aid to flow as soon as possible.”

Background

Regulations 2771/75 and 2777/75 provide the legal basis for support measures
in the eggs and poultry sector. The only market support measures provided for in
the regulations are export refunds. The regulations do not currently include the
possibility to provide EU financial support to farmers affected by a drastic
drop in consumption.

Today’s proposal would extend the scope of Article 14 of both
Regulations. This allows for the 50 percent co-financing from the EU budget of
veterinary measures (such as slaughtering of chickens) and the 50 percent
co-financing of compensation for animal movement restrictions resulting from an
outbreak of animal disease on a farm on the territory of the EU.

This would allow “exceptional market measures” to be taken at the
request of Member States, to take account of: “serious market disturbances
directly attributed to a loss in consumer confidence due to public health, or
animal health risks.”

Once Member States submitted their proposed measures, the Commission would
have to approve them through the Management Committee procedure.